The Road to Liquidity
Friday, October 7, 2005 11:54:24 AM
No, we are not talking ninja turtles. We’re not even, really, talking about pencil squeezers.
Van Gogh did some eyeball pleasers He must have been a pencil squeezer He didn’t pain the Mona Lisa That was some eye-talian geezer
(There Ain’t Half Been Some Clever Bastards – Ian Dury)
We’re talking about the (barely) fascinating world of book sales on Amazon. For reasons which I shall explain in a minute, I currently have copies of “I, Michelangelo” and “I, Raphael” up for sale on Amazon.co.uk. MikeyA’s coffee table collection is available for a very reasonable £21 and has a sales rank of 427,000 or thereabouts, whilst Raph’s designer door-stop is available for an even more reasonable £15 and has a sales rank of about 876,000. I really must do a search on Amazon some time to see if there is an “I, Rolf” collection.
Going on the sales ranks, neither book is exactly a hot seller though hopefully I will sell the buggers at some point to art fans, but I am curious to know why Michelangelo is a bigger seller than Raphael, and yet his book costs more? It doesn’t work that way with CDs, does it? If I want to get the new Coldplay album I could (seek psychiatric care or …) probably get it for about six or seven quid, but if I want a copy of a Pluto Shervington album, I’m probably going to have to stump up £13, unless it is some sort of Hallmark or Music for Pleasure compilation.
Of course, the going rate for either book could change. When you open up a seller’s account on Amazon they give you a helpful page that lists all the titles you have up for sale and which compares your selling price with that of the cheapest seller; the page also enables you to update a whole page’s worth of titles (up to 350 to a page) with new prices at a single swoop, so it is quite easy to zip down the page, undercutting the lowest seller. So easy, in fact, that 2 hours after you have done so, some other bugger’s done much the same and you are once again not the lowest priced seller on half a dozen items. Before you know it, this tit for tat mentality has reduced everyone’s profit margins by 25% in the space of 8 hours. The free market in action. Quite fun, really, though I might be less enamoured of the game were I selling books on Amazon for a living.
So, what am I doing on Amazon?
Well, it all dates back to a time when I was persuaded by Peter Stanton to join a book club on the grounds that Peter had already used his allocation of 10 titles for that month and he wanted me to sign up and blag a few more titles for him while they were cheap. Lest you think that Peter is a manipulative sort, he did point out that the book club featured a large selection of exactly the sort of books he and I liked, which are the sort of books that give pedants a bad name (think “Eats, Shoots and Leaves” to the power of ten).
So, I signed up and since then have enjoyed a varied assortment of cheap but interesting books. “A Nice Cup of Tea and A Sit Down” – the absolutely essential guide to cake and biscuits; “How to Dunk A Donut” – the science of everyday things (are we sensing a theme here? The book should more accurately have been called “How to dunk a biscuit” but I presume they changed the name for the American market – although it does turn out that the doughnut is scientifically more suited to non-collapsing dunking than the humble biccie); plus a very interesting book about people who were once very famous but are now totally forgotten – like Peter Marinello. Well, OK, slightly more historic and significant figures than the Scottish George Best.
The only drawback with the book club is that you have to remember to cancel the “Recommended Title of the Month” each month, otherwise you end up with something very large, expensive and dull on your doorstep, such as “Bronze Armour Excavations in Granada”. As it turns out, if you do forget to cancel the title you can send it back and incur a handling charge of £3, but the first time I fell victim to this form of “inertia selling” I meekly accepted my fate and kept the book, which was “The Road To Reality” by Roger Penrose. So far as I can work out, Roger Penrose is the bloke Stephen Hawking consults when he finds a problem he can’t resolve. So, right up my street really – and Geoff Challinger thinks I only read private detective novels!
Having lumped out £23 for this weighty tome (£5.30 to send by post, if you must know) I thought I might as well have a stab at reading it. Not that I was particularly interested in finding out how the universe works. I regard the workings of the universe in much the same way as I regard light switches; so long as the sun comes up in the morning I’ll let the universe run itself, and likewise, so long as the light bulb lights up when I flick a switch, I’ll not worry too much how this miracle came about.
You should know that I dropped out of physics in the fourth year (year 10 for you juvenile types) and I can’t say that the physics teacher was surprised or disappointed. Furthermore, I barely scraped through maths at “O” level (GCSE for you juvenile types). Thank God for the multiple choice section, I say, though had I read “The Road To Reality” all the way through, maybe I would be thanking someone other than God. So, reading a heavy maths book on the train that had lots of formulae in it was an ambitious undertaking and I abandoned it in the third chapter once Penrose got beyond the Greeks and the history of maths.
Mind you, it did look impressive on my desk at work when I plonked it down in my in-tray each morning. However, eventually it got relegated to the back of the bookshelf and I tried to forget about wasting £23 on it. Subsequently, number one son, who has never read a book in his life in his own free time (unless you count the Argos catalogue) asked me to get hold of a book called “Hitler: A Study In Tyranny” by Professor Alan Bullock. Obviously, this was not “reading for pleasure” but was a rare – nay, unique – example of number one son “reading around the subject” and so, like any doting middle-class father, I was happy to purchase it for him. Of course, I knew he would never actually read all of it and quite possibly he wouldn’t read any of it, so I was overjoyed when I noticed on Amazon that I could buy a used copy for two quid (call it four once you add in p&p).
Having been introduced to the concept of selling used books on Amazon, naturally my mind hit on the idea of selling “The Road to Reality”. I listed it for about £16 (“good as new”) and it sold within a week to some grateful student at Oxford University. Once Amazon fees and postage had been taken into account I had recouped about £9 of my £23 purchase fee and was slightly chuffed at reducing my losses.
That would have been the end of the book-selling venture, other than selling off some of number 3 son’s books to make room for the next batch of Edge Chronicles I will doubtless end up buying him, but I noticed in next month’s book club catalogue that “The Road to Reality” – now that it was no longer a recommended title of the month – had slumped in price to £3.99. Provided my monthly order came to more than £30, delivery would be free, so naturally I loaded up and bought ten copies!
For a while, there were truly rich pickings to be had with this book. One copy I sold for a profit of just under £9 but gradually the competition has forced me down to a price where I am making a mere £3.59 per book. Sales tend to be a bit seasonal. I’ve sold 4 since the beginning of September, so I don’t think I’ll be retiring on the proceeds just yet. Now that I have told you lot about the huge mark-up available on this book I expect competition will get even tougher
Still, as my wife, Lin, points out, I am not really in it to make money. “It’s just a game for you, isn’t it?” and, as usual, she is right. Though making money on the game is nice, too. Most of the people from my gaming crowd who do blogs have got seriously into online poker and this fills up much of their blog space; I have played online poker and am not ashamed to say that I blew my £50 deposit (I only signed up so a Spurs message board could get a kick-back) in the space of 3 months, so I don’t think anyone will be logging on to read my thoughts on poker strategy. So, I need some other form of activity to bore you with – something I can do some duvet-stuffing on.
Whoa! Jargon alert!
“Duvet-stuffing” is a phrase I coined back in the day that was picked up on by Mike Siggins. I was reviewing a gaming fanzine, called “Ha! I Have No Tuba”, which was edited by Richard Clyne. In this zine he ran a Statis Pro Football league. This was pre-email era (more or less, though if anyone was likely to have an email address in those days, Richard was) and so players would send in orders, by post, for this detailed and long-playing American football game. Richard would then play through the games (each match probably took about 3 hours to run through – maybe more if he kept copious stats, which he undoubtedly did) according to each coach’s instructions, and then print match reports in his zine. I happened to mention that I would rather stay in an stuff a duvet full of lint in preference to adjudicating Statis Pro games, since when the phrase “duvet stuffing” has come to refer to any self-indulgent, futile yet enjoyable practice, usually involving the compilation of massive amounts of statistics of zero interest to anyone other than the compiler. Avalon Hill’s “B-17: Queen of the Skies”, anyone?
So, let’s stuff that duvet!
The sales rank of “The Road to Reality” is 3,274, suggesting that physics is a lot more popular subject that mediæval pencil squeezers (join the “Campaign to Save the Dipthong” now!). I can only assume it is essential reading for university bods studying physics and related subjects. Though I have assiduously researched the Amazon prices of other cheap books offered by my book-club, “The Road to Reality” remains the cash-cow, though the books that sold out most swiftly were “Timber Building in Britain” (sales rank: 56,078) and “Britain in Revolution” (70,994), which both sold within hours of me listing them.
The game for me – apart from the helter-skelter undercutting pricing system (Reiner Knizia, are you watching?) – is working out which new batch of books to get in each month. Obviously “The Road to Reality” gets restocked every so often, but what’s the trade-off between a slow selling book with a big profit margin (“Tamerlane: Sword of Islam” – a real crowd-pleaser this, in the current environment, with a bafflingly low sales rank of 227,492 but a decent profit margin of around 125%) and a relatively popular title with a low margin, such as the aforementioned “Britain in Revolution: 1625 – 1660”, where I made a profit of £2.59.
Should I be looking at percentage profit margins or absolute (pounds, shillings and pence) margins?
I guess that so long as I have the room to store the things, I can afford to continue to take speculative punts on such “must-have” titles (ahem) as “Glasgow In The Age of the Tram” but ideally what I want to do is find 9 other titles that are as rock solid as “The Road To Reality”.[/FONT]